This year my family joined millions of others whose health-insurance premium has become their biggest annual expense. More than our mortgage. More than our property taxes. More than our state income tax. More than our annual food or energy costs. With this year’s $194-a-month premium increase, I could roughly buy a Chevy Sonic or Ford Fiesta. Since 1999 our premiums are up 350%. Bad as this is, the story gets worse.

Each year our family is subject to paying health-insurance premiums and, if we see a doctor, deductibles and copays. Think of this total exposure as “health-care cost risk”—the sum of certain payments (premiums) plus the potential payments you could incur (copays and deductibles). Since early 1999 my family’s health-care cost risk has increased 1,190%. Over the same period, the Dow Jones Industrial Average is up about 80%, the consumer-price index is up 42%, gold is up 200%, median new home prices are up 74%, and the average cost per gigabyte of hard drive is down 99% to under three cents from $22.

Here’s the math behind my whopping increase. In 1999, having gone into business for myself, I needed health insurance for my then-young family. To enroll, I met a Blue Cross Blue Shield agent at Starbucks. (Quaint, huh?) We insured our family of four for $274 a month with a $250-per-person deductible.

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About thebenefitblog

Eric is a Producer at Lockton Insurance Brokers, Inc., the world’s largest privately held commercial broker. Eric has over 23 years of experience in the insurance industry and has spent the last 11 years with Lockton. Eric specializes in Health & Welfare Benefits,
Retirement Planning, and Executive Benefits.
Eric's clients utilize his expertise in the areas of Plan Due Diligence, Transaction Structure, Fiduciary Oversight, Investment Design, Compliance and Vendor negotiation to improve the operational & financial outcome for each client. The Benefit Blog is a place to share that expertise and industry news.